TaxTMI 
TaxTMI 
2025 (7) TMI 1633
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....ase tax on cotton purchased from within the State of Haryana without payment of tax on the strength of registration certificate. Respondent No. 1 deposited the said amount on 27.04.2005. Aggrieved against order dated 29.03.2005 passed by the Assessing Authority, respondent No. 1 filed an appeal before the Joint Excise & Taxation Commissioner (Appeals), Rohtak, (for short, 'JETC'), which was dismissed vide order dated 29.11.2005 on the ground that respondent No. 1 was not entitled to exemption from payment of purchase tax. Respondent No. 1, being dissatisfied with order dated 29.11.2005 passed by JETC (Appeals), preferred an appeal before the Haryana Tax Tribunal, which was also dismissed vide order dated 20.02.2006, holding the same view as expressed by JETC (Appeals) in its order dated 29.11.2005 that the transactions in question did not fall under Section 5(3) or Section 3 of the Central Sales Tax Act, 1956 (for short, 'CST Act') and thus, could not be treated as inter-state sales calling for deduction under Section 27(1)(b)(A)(ii) of the HGST Act, as inter-state sales are deemed exports as defined under Section 3 of the CST Act covered by Section 3. Deemed exports cannot be view....
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....d respondent No. 1 entitled to interest on the entire refund amount from the date of deposit till the date of refund at the rate of 1% per month under Section 20(8) of the HVAT Act. Hence, the present appeal. SUBMISSIONS OF LEARNED COUNSEL FOR THE PARTIES Appellant-State 5. Learned counsel for the appellant inter alia contends that since the demand of Rs. 12,25,914/- was raised under the HGST Act and the refund was also allowed under the same Act, the interest on such refund must be payable in accordance with the provisions of Section 43(2) read with Rule 35(1)(b) of the HGST Act. She further contends that statutory provisions have to be applied in toto and not in a piecemeal manner i.e for demand and refund HGST Act and for interest HVAT Act. Furthermore, she contends that interest cannot be granted on the basis of equity under the tax enactment. 6. In support of her contentions, she relies upon the judgment passed by this Court in Khazan Chand Nathi Ram Vs. State of Haryana, 2004 (136) STC, 261, which was rendered at the time when there was transition from HGST Act, 1973 to HVAT Act, 2003, wherein this Court by referring to right to appeal observed that condition of p....
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....08.2015. He further contends that the SLP(C) No.7574 of 2016 filed by the State of Haryana against the said judgment dated 07.08.2015 was also dismissed vide order dated 10.09.2024. He, therefore, prays that the present appeal be allowed. 9. We have heard learned counsel for the parties and perused the file with their able assistance. 10. While admitting the present appeal, this Court vide order dated 20.05.2024 framed the following questions of law for consideration: - "(d) Whether the Hon'ble Haryana Tax Tribunal is justified in allowing the interest on the delayed payment from the date of deposit and not from the date of order in contravention of the provisions of Section 43 and Rule 35(1)(b) of HGST Act, 1973. (e) Whether the Hon'ble Haryana Tax Tribunal is justified in not appreciating the provisions of Section 43 of the HGST Act, 1973." 11. A perusal of the assessment order dated 29.03.2005 shows that it is passed under the HGST Act, 1973. Admittedly, the assessment order in the present case for the Assessment Year 1996-97 was passed on 29.03.2005, whereby, additional tax demand of Rs. 12,25,914/- was created. The said amount was deposited by the re....
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....plicable to this case, then in view of Section 20(8) of the Act ibid, the assessee-appellant is entitled to interest for the entire period from the date of deposit of the amount by it till the date of refund thereof to it. In this regard, there is also clarification issued by the State Government vide order dated 03.07.2006 under Section 56(3) of the HVAT Act on the application of M/s Caparo Maruti Ltd., Bawal, holding that in view Section 20(8) of the HVAT Act, interest is payable from the date the assessee made payment till the date of refund to the assessee. So the question to be determined is as to whether the HGST Act and the HGST Rules are applicable or the HVAT Act is applicable? 6. Section 61 (1) of the HVAT Act is reproduced hereunder for ready reference:- "61. Repeal and Saving (1) The Haryana General Sales Tax Act, 1973 (20 of 1973), is hereby repealed: PROVIDED that such repeal shall not- (a) affect the previous operation of the Act so repealed or anything duly done or suffered thereunder; or (b) affect any right, title, privilege, obligation or liability acquired, accrued or incurred under the said Act; or ....
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....er, title, privilege, obligation or liability acquired, accrued or incurred under the said Act; or (c) affect any act done or any action taken (including any appointment, notification, notice, order, rule, form, regulation, certificate) in the exercise of any power conferred by or under the said Act; and any such act done or any action taken in the exercise of the powers conferred by or under the said Act shall be deemed to have been done or taken in the exercise of the powers conferred by or under this Act as if this Act were in force on the date on which such act was done or action taken; and all arrears of tax and other amount due at the commencement of this Act may be recovered as if the same had accrued under this Act. (2) Notwithstanding anything contained in sub-section (1), - (a) any application, appeal, revision or other proceedings made or preferred to any officer or authority under the said Act and pending at the commencement of this Act, shall, after such commencement, be transferred to and disposed of by the officer or authority who would have had jurisdiction to entertain such application, appeal, revision or other proceedings under....
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....turnover does not fall short of the average annual turnover during the period of exemption; and (II) it shall not export out of State any goods produced by it, for a period of next five years or such shorter period for which it has availed of exemption from payment of tax and if it fails to do so, it shall be liable to pay to the State Government, in the prescribed manner the amount of tax in respect of which it has availed of exemption from payment after reducing therefrom the tax paid by it before such failure; (ii) an industrial unit availing the benefit of capital subsidy may, in the prescribed manner, change over to deferment of payment of tax for the remaining period and the remaining extent of benefit but where an industrial unit does not choose to do so, the benefit of capital subsidy to it shall cease to take effect on and from the appointed day; (iii) an industrial unit availing the benefit of deferment of payment of tax, whether by change over under the foregoing provisions or otherwise, may, in lieu of making payment of the deferred tax after five years, pay half of the amount of the deferred tax upfront along with the returns and on making pa....
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....ined or continued in any court or before any authority for the refund of any such tax so collected; and (iii) no court or authority shall enforce any decree or order directing the refund of any such tax so collected." 17. Bare reading of Section 61 of the HVAT Act reproduced above shows that repeal has saved the action taken under the HGST Act, which included orders as well, and Section 61 of the HVAT Act specifically reads/provides that any such act done or any action taken in exercise of powers conferred by or under the HGST Act shall be deemed to have been done or taken in exercise of power conferred by or under this Act (HVAT Act) as if this Act was in force on the date on which such Act was done or action taken, and all arrears of tax and other amount due at the commencement of this Act may be recovered as if the same had accrued under this Act. Meaning thereby that Section 61 (Repeal and Saving) secured the revenue so that it can be recovered as per procedure laid down under the HVAT Act. 18. Now coming to the judgment referred to by the learned counsel for the appellant as well as respondent No. 1. 19. Learned counsel for respondent No. 1 has relied upon ju....
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....essee filing the appeal to deposit the amount before the authority or the Tribunal, but to pay the amount of tax, penalty and interest in order to have his appeal entertained. The tax, penalty or interest, if paid, is, therefore, enjoyed by the revenue. The petitioner had admittedly paid the amounts to the authorities. The authorities have had the benefit thereof from the date of payment. If the appeal succeeds, the assessee is entitled to a refund of such an amount as may be directed by the Appellate Authority. Absent any statutory bar, there is no justification for denying a successful assessee interest upon the amount(s) to be refunded for the period during which the revenue had the benefit thereof. The revenue suffers no loss thereby for it has enjoyed the benefit of the money during this period. It has enjoyed the benefit of the money that it was never entitled to. 9. In equity, the petitioner's claim is established. The question is whether the claim is barred by any provision of law. We think not. The question also is whether interest is payable in law. It is, in view of the judgements of this Court, binding on us. We, therefore, need look no further while granting i....
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....n above referred to judgment, this Court granted interest as per the provisions of Section 43, Rule 35 and Section 25 of HGST Act. Further, Hon'ble the Supreme Court has categorically observed, as reproduced above, that the High Court has not decided any issue in terms of the available statutory provisions rather, it has exercised extraordinary jurisdiction under Article 226 of the Constitution of India in light of the peculiar facts of that case. 23. In the present case we are not exercising extraordinary jurisdiction under Article 226 of the Constitution of India but are deciding the appeal. Therefore, judgment referred to by learned counsel for the respondent does not come to his aid. 24. In the judgment passed by this Court in Khazan Chand Nathi Ram's case (supra), as referred to by learned counsel for the appellant, this Court held that right of appeal is a substantive right that vests at the date of commencement of the lis and is governed by the law prevailing at that time. Section 39(5) of the HGST Act, requiring pre-deposit of tax, interest, and penalty, continues to apply even after the repeal of the Act, as the right is saved under Section 4 of the Punjab General Cl....
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....the appeal holding that there is no implied repeal of provisions of Section 39(5) of the HGST Act and the appeal is to be entertained only under the provisions of Section 39(5) of the HGST Act. It is the said order which is impugned in the present writ petition. 3. In the written statement, it has been pleaded that tax liability related to the period when erstwhile HGST Act was still in existence and has not been repealed. Reference was made to the decision of the Supreme Court in the case of Titaghur Paper Mills Co. Ltd. v. State of Orissa [1983] 53 STC 315 to state that where any right or liability arises under a particular Act, the remedy available under that Act has to be availed of. Reference was also made to the decision of the Supreme Court in the case of Manphul Singh Sharma v. Smt. Ahmedi Begum (1994) 5 JT 49 (SC) to state that when a repeal is accompanied by a fresh legislation on the same subject, the provisions of the new Act will have to be looked into to determine whether and how far the new Act projects or keeps alive the old rights and liabilities. It has been stated that the provisions of Sub-section (2) of Section 61 of the HVAT Act envisages the procedur....
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.... to govern the right of appeal vested in the petitioner which is saved in terms of Section 4 of the Punjab General Clauses Act (as applicable to State of Haryana)." 26. Above referred to judgment passed by this Court supports the case of the appellant. CONCLUDING ANALYSIS 27. Before proceeding to conclude, it would be apposite to reproduce Section 6 of the General Clauses Act, 1897 along with the law laid down by Hon'ble the Supreme Court. 28. Section 6 of the General Clauses Act, 1897, is reproduced as under:- 6. Effect of repeal. - Where this Act, or any [Central Act] or Regulation made after the commencement of this Act, repeals any enactment hitherto made or hereafter to be made, then, unless a different intention appears, the repeal shall not- (a) revive anything not in force or existing at the time at which the repeal takes effect; or (b) affect the previous operation of any enactment so repealed or anything duly done or suffered thereunder; or (c) affect any right, privilege, obligation or liability acquired, accrued or incurred under any enactment so repealed; or (d) affect any penalty, forfeiture or punishment incurr....
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.... of Section 74(2) of the Partnership Act, in course of his judgment, the learned Chief Justice referred by way of analogy to Section 6(e) of the General Clauses Act and observed as follows (at p.7): "It seems that section 6(e) would apply to those cases only where a previous law has been simply repealed and there is no fresh legislation to take its place. Where an old law has been merely repealed, then the repeal would not affect any previous right acquired nor would it even affect a suit instituted subsequently in respect of a right, previously so acquired. But where there is a new law which not only repeals the old law, but is substituted in place of the old law, section 6(e) of the General Clauses Act is not applicable, and we would have to fall back on the provisions of the new Act itself". These observations could not undoubtedly rank higher than mere 'obiter dictum' for they were not at all necessary for purposes of the case, though undoubtedly they are entitled to great respect. In agreement with this dictum of Sulaiman C.J., the High Court of Punjab, in its judgment in the present case, has observed that where there is a simple repeal and the Legislature has either....
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.... "The East Punjab Refugees (Registration of Land Claims) Ordinance No. VII of 1948 is hereby repealed and any rules made, notifications issued, anything done, any action taken in exercise of the powers conferred by or under the said Ordinance shall be deemed to have been made, issued, done or taken in exercise of the powers conferred by, or under this Act as if this Act had come into force on 3rd day of March, 1948." We agree with the High Court that the expression "anything done" occurring in the section does not mean or include an act done by a person in contravention of the provisions of the Ordinance. What the section contemplates and keeps alive are rules, notifications or other official acts done in exercise of the powers conferred by or under the Ordinance and these powers are mentioned in several sections of the Act. But although the lodging of the claim does not come within the purview of section 11 of the Act, we are of opinion that the proviso to section 4 of the Act clearly shows that a claim filed under the Ordinance would be treated as one filed under the Act with all the consequences attached thereto. Section 4 of the Act provides for the registration of....
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.... consider it necessary to express any opinion upon it. The provisions of Section 6 of the General Clauses Act will, in our opinion, apply to a case of repeal even if there is simultaneous enactment unless a contrary intention can be gathered from the new enactment. The result is that the appeal is allowed and the judgment of the High Court set aside. The Advocate-General does not press for enhancement of sentence passed on the respondent. Consequently, it is unnecessary for the High Court to hear the reference made to it by the District Magistrate, Jullundur any further. The sentence already passed upon the respondent by the trying Magistrate shall stand and if the fine of Rs.120 has not already been, paid, it shall be paid now. In default, the respondent shall suffer rigorous imprisonment for one month. Appeal allowed." 30. Hon'ble the Supreme Court in M/s Gammon India Ltd. Vs. Spl. Chief Secretary & Ors., 2006 (3) SCC 354 held as under:- "2. The principal question which falls for adjudication in these appeals is regarding the jurisdiction of the Assistant Commissioner of Commercial Taxes, Warangal Division, Andhra Pradesh in initiating and completing penalty ....
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....as made or preferred. (3) Upon such repeal of the Andhra Pradesh General Sales Tax Act, 1957 the provisions of Sections 8, 8-A, 9 and 18 of the Andhra Pradesh General Clauses act, 1891 shall apply." 14. Section 80(3) of the A.P.V.A. Tax Act provides for the application of Section 8 of the Andhra Pradesh General Clauses Act, 1891 on the repeal of the APGST Act, 1957. Section 8 of the A.P. General Clauses Act, 1891 deals with the effect of repealing the Act, reads as under : "Effect of Repealing an Act- Where any Act to which this Chapter applies, repeals any other enactment, then the repeal shall not : (a) affect anything done or any offence committed, or any fine or penalty incurred or any proceedings begun before the commencement of the repealing act; or (b) revive anything not in force or existing at the time at which the repeal takes effect; or (c) affect the previous operation of any enactment so repealed or anything duly done or suffered under any enactment so repealed; or (d) affect any right, privilege, obligation or liability acquired, accrued or incurred under any enactment so repealed; or (e) affect a....
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....ight. 23. The legal position which existed in England before Section 38(2) was inserted in the Interpretation Act of 1889 is reflected from the following two English cases. 24. In Kay vs. Goodwin reported in (1830) 6 Bing. 576 : English Reports (Volume 130) at page 1403, Tindal, Chief Justice observed that the effect of repealing a statute is to obliterate it as completely from the records of the Parliament as if it had never been passed; and it must be considered as a law that never existed except for the purpose of those actions which were commenced, prosecuted and concluded whilst it was an existing law. 25. Lord Tanterden in Surtees vs. Ellison - (1829) 9 B & C. 750 : English Report (Volume 109) at page 278 observed that when an Act of Parliament is repealed, it must be considered (except as to transactions past and closed) as if it had never existed. 26. In England, to obviate such result a practice was developed to insert a saving clause in the repealing statute with a view to preserve rights and liabilities already accrued or incurred under the repealed enactment. When it was found cumbersome to insert a saving clause in every statute, the....
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.... necessary. But there is a manifest distinction between an investigation in respect of a right and an investigation which is to decide whether some right should or should not be given. On a repeal, the former is preserved by the Interpretation Act. The latter is not." 29. When we look to the American law, we find basic similarity in the scope and ambit of the provisions relating to repeal and reenactment of the statute. We deem it appropriate to refer some relevant American judgments. 30. In Bear Lake & River Waterworks & Irrigation Co. v. Garland, 164 US 1, 41 L Ed 327, the U.S. Supreme Court has held that the reenactment of a statute which has been repealed by specific provision, or by implication from later legislation, invalidates the previous repeal and restores the statute to effective operation. 31. In that very case, the Court held that a so-called "simultaneous repeal and reenactment" is a misnomer, for there is no repeal by implication effectuated of the original act, and even though the "repeal" is declared by specific provision in the later enactment the courts will construe the unchanged provisions as being continuously in force. 32.....
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....s not interrupted by repeal and reenactment at same time in substantially the same language. 38. In the case of Pentheny, Ltd. vs. Government of Virgin Islands Federal Reporter 2d Series Vol. 360 pg. 786, the U.S. Court of Appeals has observed as under: "Simultaneous repeal and re-enactment of substantially the same statute, or part thereof, is a substitution and not a repeal, and the statute, or part thereof, thus substituted is construed as a continuation of the original provisions to the extent re-enacted and jurisdiction of administrative agency under such statute is not disturbed as to those provisions which were continued under the new statute." 39. XXX XXX XXX 40. Analysis of the provisions and some decided cases of England and America reveal the existence of similar provisions and interpretation in the respective countries. 41. Section 6 of the General Clauses Act, 1897 is predominantly based on Section 38 of the English Interpretation Act, 1889. We have already reproduced Section 38 of the English Interpretation Act, 1889. In order to discern and evaluate the strong similarity between the Indian and English Law on this subject, ....
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....ffence was held to be void under Article 19(1)(a) read with Article 13 as being inconsistent with one of the Fundamental rights guaranteed by Part III of the Constitution. In the circumstances, the point that was debated before this Court was whether the prosecution could be continued after the enactment became void. In this case, the Court by a majority judgment held that the Constitution was prospective in its operation and that Article 13(1) would not affect the validity of these proceedings commenced under pre-Constitution laws which were valid up to the date of the Constitution coming into force, for to hold that the validity of these proceedings were affected would in effect be treating the Constitution as retrospective. Therefore, it was considered that there was no legal objection to the continuance of the prosecution. 45. The controversy in issue was dealt with comprehensively with meticulous precision by a Constitution Bench of this Court in State of Punjab vs. Mohar Singh (1955) 1 SCR 893. Respondent Mohar Singh filed a claim as an evacuee under the East Punjab Refugees (Registration of Land Claims) Act, 1948. The claim was investigated into and it was found to ....
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....ral Clauses Act would therefore preserve the rights and liabilities created by Section 153-C of the Act of 1913 and a continuance of the proceeding in respect thereof would be competent in spite of the repeal of the Act of 1913, unless of course a different intention could be gathered." 48. A Constitution Bench of this Court in State of Orissa vs. M.A. Tulloch and Co., (1963) 4 SCR 461, also had an occasion to examine the controversy regarding repeal of the Act. The submission in this case was that the supersession of the Orissa Act by the Central Act was neither more nor less than a repeal. The reference was made to Section 6 of the General Clauses Act, 1897 which has been reproduced (supra). In the said case, the submission was that the interpretation of the Section was two-fold: (1) the word 'repeal' used in the opening paragraph was not confined to express repeal but that the word was comprehensive enough to include cases of implied repeals; (2) it was submitted that if the expression 'repeal' in Section 6(b) be deduced as being confined to express repeals, still the principle underlying Section 6 was of general application and capable....
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....ute to that legislature which effects a repeal by necessary implication the same intention as that which would attend the case of an express repeal. Where an intention to effect a repeal is attributed to legislature then the same would, in our opinion, attract the incident of the saving found in Section 6 for the rules of construction embodied in the General Clauses Act are, so to speak, the basic assumptions on which statutes are drafted. 51. The Court examined the ambit and scope of Section 6 of the General Clauses Act, 1897 in Tulloch's case. According to the ratio of the said judgment, the principal underlying Section 6 of the General Clauses Act, 1897 is that every later enactment which supersedes an earlier one or puts an end to an earlier state of the law is presumed to intend the continuance of rights accrued and liabilities incurred under the superseded enactment unless there were sufficient indications expressed or implied in the later enactment designed to completely obliterate the earlier state of the law. 52. In view of the interpretation what follows is absolutely clear that unless a different intention appears in the repealing Act, any legal proceed....
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....ate or wipe off the former enactment wholly or in part, then it would be a case of total or pro tanto repeal. If the intention was merely to modify the former enactment by engrafting an exception or granting an exemption, or by super-adding conditions, or by restricting, intercepting or suspending its operation, such modification would not amount to a repeal. Broadly speaking, the principal object of a repealing and amending Act is to 'excise dead matter, prune off superfluities and reject clearly inconsistent enactments'. 57. When there is a repeal and simultaneous reenactment, Section 6 of the General Clauses Act would apply to such a case unless contrary intention has been gathered from the repealing Act. Section 6 would be applicable in such cases unless the new legislation manifests intention inconsistent with or contrary to the application of the section. When the repeal is followed by a fresh legislation on the same subject, the Court would undoubtedly have to look to the provisions of the new Act only for the purpose of determining whether the new Act indicates different intention. The object of repeal and reenactment is to obliterate the Repealed Act and to ge....
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....finite conclusion that the Assistant Commissioner (Commercial Taxes), Warangal Division was fully justified in initiating and completing the proceedings under the A.P.G.S. Tax Act even after it is repealed." 31. The issue involved in the present appeal is that whether the payment of interest is to be paid as per provisions of HGST Act, 1973 or HVAT Act, 2003, when the assessment order is passed under the HGST Act, 1973 on 29.03.2005, i.e after the coming into force of HVAT Act, 2003. 32. Hon'ble the Supreme Court in Mohar Singh Pratap Singh's case (supra) and M/s Gammon India Ltd.'s case (supra) held that whenever there is repeal of an enactment and simultaneous re-enactment, re-enactment is to be considered/construed as re-affirmation of old/earlier law and provisions of repealed Act which are thus, re-enacted continue in force uninterruptedly unless, re-enacted enactment manifests an intention incompatible with or contrary to the provisions of repealed Act. Further it was held that such incompatibility will have to be ascertained from a consideration of relevant provisions of the reenacted enactment and mere absence of saving clause is, by itself, not material for considera....